India’s Central Government has mostly mismanaged the central program for promoting solar energy in India. Despite a massive crash in solar component prices, demand in India has flattened out in 2013 even as other countries show sharper growth. Most of the success in India’s solar energy has come through Gujarat’s Feed in Tariff subsidy policy, which has resulted in installation of more than 500 MW of solar PV plants in that state. India’s JNNSM policy has proved to be a cropper, compared to the media headlines it has generated.

India’s JNNSM Phase 1 which is targeting 1000 MW of Solar Power Capacity by 2013 is in jeopardy due to irrational bidding,financing and small size. The 150 MW Solar PV and ~500 MW of Solar Thermal Capacity which has been put to bidding is seeing massive discounts to the base price which would allow normal return. This will eventually lead to project winners abandoning these projects or delaying it inordinately, leading to a failure of the first phase. India Solar Thermal Bidding has already seen Massive Discounts from the base prices of Rs 15.31 set by CERC and the Solar PV project bidding for 150 MW is going to see equally ferocious discounts. Tata Power which is India’s largest private utility is staying away from these auctions due to the above problems. Renewable Energy in India has a huge growth potential with Solar Energy the brightest Green Energy Sector. This has attracted companies in droves leading to hyper competition for the first phase of India’s Jawaharlal Nehru National Solar Mission. However huge competition in this subsidy driven sector is not necessarily good for the growth of Renewable Energy as irrational bidding by small players would lead to project failures.

I have been critical of India’s utility focused subsidy policy and think that it does not make great sense. India’s transmission network remains one of the worst in the world, with 40% of the power stolen or lost due to inefficiency. This means that the large solar farms are almost 40% more expensive than equivalent rooftop solar installations. However, MNRE persists with its misguided policy and now wants to compound its mistake by building giant 500 MW plus solar plants. This will bring down the cost by around 10% to Rs 5.50/Kwh, from the current rates of Rs 6-6.5/Kwh. However, MNRE is not factoring in the 40% transmission losses. RE developers in TN are already facing problems in evacuation of power from their wind farms. The state is considering building 2 exclusive transmission lines for green energy at considerable expense. India seriously needs to refocus its policy to promote clean green distributed home solar solutions rather than land hogging, grid hogging huge power plants using solar panels.

To give a boost to its efforts to bring down the cost of solar power in India, Ministry of New and Renewable Energy (MNRE) is planning to roll out large megawatt size solar power projects, in the order of 500 MW and above.

“We want to bring in volume in the Indian solar sector. Several states have already rolled out mega-sized solar power projects, its needs to be done at central level too,” said Tarun Kapoor, joint secretary, MNRE. Till yet MNREhas tendered projects of size 50 MW through National Solar Mission, though several states have either commissioned or executing solar power projects of larger size to meet their escalating demand of power.

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in